I have a good friend who travels 220 days a year throughout the world. After returning from one of the trips I stopped by to see him at his place. As I was leaving, he handed me a back of coins and said, “take these. I can’t use them anymore”. After returning home, I opened the bag and it contained his “dresser change”. You know, those few coins from our pockets or purses that accumulate when we travel or shop and need to be cleaned out. The curious aspect of the contents was that so many countries were represented and. of course, those he visited more were in greater numbers.
And now to the point. After sorting all of them – there were more than 10 pounds of coins in the bag – I set out to convert them to dollars. (I live in the USA). Guess what. It’s not possible, at least where I reside in Southern California. Paper currency can be exchanged, but no one wants the coins even though I had hundreds of dollars worth of them. The only way to use them (I was told) would be to return to the country where the local legal tender currency was changed into the coins. Please note the word “changed”, since that’s exactly what happens when you receive change during a transaction. And the change can be used only in more limited transactions, especially if you leave the country with it.
Bitcoin crypto currency operates in a similar fashion these days in early 2018. The difference is that for some transactions the bearer provides bitcoin in exchange for labor or some valued commodity or service or local currency. Then the receiver (you or I) now has “coin” that can be used for a limited number of financial transactions within the communities where it was issued.
This example isn’t a perfect representation of the Bitcoin world today, but it’s close and also somewhat like coupons or the claim and discount codes we can use for transations online. Its face value is known to be a certain amount, but its actual value depends upon the place or situation where you can use it.
Thanks to TCIH